France is facing an intensifying debate over its global responsibilities as mounting national debt puts pressure on the country’s overseas development aid budget. At the same time, a bold new proposal from economist Gabriel Zucman is stirring passions in Paris and beyond, as he calls for a sweeping wealth tax targeting the nation’s richest households. Together, these developments paint a vivid picture of a country wrestling with how to balance its international commitments and domestic priorities in the face of economic uncertainty.
The French Development Agency (AFD), the public financial institution charged with implementing France’s overseas development assistance (ODA) programs, finds itself at the heart of this storm. In January 2025, the AFD’s board of governors approved a funding budget of €9 billion for the year, but that figure belies a worrying trend: France’s ODA budget has shrunk from 0.56% of gross national income (GNI) in 2022 to just about 0.48% in both 2024 and 2025, according to The Economic Times. This decline comes as the country’s national debt continues to worsen, with fiscal pressures mounting on all sides.
Philippe Orliange, executive director of geographies at AFD, described the current climate bluntly: “The debate in France is harsh because of the fiscal situation.” The question of whether France should continue to spend public money on international cooperation has become a lightning rod for political debate. Some elected representatives, citing the country’s budget woes, argue that France should follow the example set by the United States under former President Donald Trump, who halted most U.S. foreign aid programs and shuttered the main implementing agency, USAID, in July 2024. Others, including many voices from the European Union, are pushing for AFD to prioritize European companies in the execution of its overseas projects.
Despite these headwinds, AFD has not retreated from its global mission. In fact, the agency is forging ahead with significant engagement in the Indo-Pacific region—a part of the world that now accounts for nearly 30% of its funding budget. In 2024, the agency opened new offices in Fiji, Vanuatu, and Papua New Guinea, strengthening its presence in a region that aligns closely with the French government’s foreign policy vision. As Orliange explained, the Indo-Pacific is home to 54% of the global population, responsible for 50% of carbon dioxide emissions, and accounts for 40% of global GDP. It is also critically exposed to the twin threats of climate change and ecosystem collapse.
Projects supported by AFD in the Indo-Pacific span a range of urgent priorities, including energy transition, resilience to climate change, biodiversity protection, and the development of blue economy sectors. In India, the agency’s focus has been on urban development, reflecting both the region’s rapid growth and its vulnerability to environmental and economic shocks. According to The Economic Times, these efforts are not just about altruism; they are seen as essential to safeguarding global stability and advancing France’s strategic interests abroad.
Yet, the shrinking ODA budget has forced AFD to adapt. Officials note that the agency is able to offset a small reduction in budgetary support by raising most of its funds from financial markets, which are then used to provide long-term loans at concessionary rates for projects in developing countries. The budgetary support from the French government and the European Union—a smaller slice of the overall funding pie—is earmarked for interest subsidies and grants, particularly for the world’s least developed countries.
“As daunting as these issues are, the real challenge is ensuring that France and Europe continue to look at the world through the right lens,” said Orliange, underscoring the importance of maintaining a global perspective even as domestic pressures mount. The debate over foreign aid has become a proxy for larger questions about France’s role in the world and the values it wishes to project.
Against this backdrop, economist Gabriel Zucman has emerged as one of the most talked-about figures in French public life. At just 38 years old, Zucman has captured the imagination—and ire—of a nation grappling with rising living costs and a sense that the economic system is failing ordinary people. As Politico reports, Zucman’s proposal is both simple and radical: he wants all households worth more than €100 million to pay an annual tax of at least 2% on the value of their assets. He estimates that this measure could generate as much as €20 billion each year, a sum that would go a long way toward easing France’s fiscal crunch.
Zucman’s idea taps into a deep well of frustration among the French public, who have watched costs rise and governments struggle to balance the books. “The 38-year-old wants all households worth more than €100 million to pay an annual tax of at least 2 percent of the value of all their assets,” Politico notes. The proposal has become a lightning rod for debate, with some hailing it as a necessary corrective to growing inequality and others warning that it could drive wealth—and investment—out of the country.
While Zucman’s wealth tax is not officially government policy, it has nonetheless injected new energy into the conversation about how France should address its budgetary challenges. Supporters argue that the country’s richest citizens should shoulder more of the burden, especially at a time when essential services and international commitments are at risk. Critics, meanwhile, contend that such a tax could backfire, undermining France’s competitiveness and driving away the very people whose investments help fuel the economy.
The juxtaposition of these two debates—over foreign aid and domestic taxation—reflects the broader tensions facing France in 2025. On one hand, there is a desire to maintain the country’s standing as a global leader and a force for good in the world. On the other, there are pressing domestic needs and a growing sense that the current system is unsustainable. The fact that these arguments are playing out so publicly is a testament to the vibrancy of French democracy, but also to the enormity of the challenges ahead.
As France moves forward, the choices it makes about its overseas commitments and domestic tax policy will shape not only its own future, but also its role on the world stage. For the AFD and for policymakers in Paris, the stakes could hardly be higher. The coming months will reveal whether France can find a path that balances fiscal responsibility with global engagement—or whether the pressures of debt and division will force a dramatic rethinking of the country’s priorities.
For now, France stands at a crossroads, its leaders and citizens alike searching for answers to questions that have no easy solutions. The outcome will resonate far beyond the banks of the Seine, touching lives from the Indo-Pacific to the heart of Europe.
